Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

A standard part of every financial statement audit is providing the auditor a representation letter reaffirming certain assertions that are implicit in preparation of financial statements in accordance with GAAP. The AICPA has now provided guidance on what should be included in a representation letter for an independent private sector audit, or IPSA, which is sometimes required with a conflict minerals report.

The topics of the representation letter aren’t very surprising and include:

  • The company confirming it is responsible for:
    • The preparation, fair presentation, and overall accuracy of the Form SD, including the Conflict Minerals Report (CMR), in accordance with Rule 13p-1 of the Securities and Exchange Act of 1934 (the “Rule”).
    • The relevancy and accuracy of the information included in the Form SD and the conflict minerals report, or CMR, including the company’s determination of the source or chain of custody of its conflict minerals, and determination of those products subject to due diligence.
  • The design of the company’s due diligence framework is in conformity with the criteria set forth in the OECD framework, and the company’s description of the due diligence measures it performed is consistent with the due diligence process that the company undertook for the reporting period from January 1, 201X to December 31, 201X (the “Reporting Period”).
  • The CMR and the related disclosures in the Form SD comply with the requirements of the Rule for the Reporting Period.
  • The company is not aware of any matters contradicting its assertion about the design of the company’s due diligence framework or the description of the company’s due diligence measures performed for the Reporting Period, as set forth in the CMR, nor has the company received any communications from regulatory agencies, reporting agencies, or others affecting the company’s assertion(s) and disclosures.

Those planning on an IPSA under AICPA standards should review the guidance to make sure they are comfortable with the assertions.

Note that for IPSAs issuers have a choice between an audit by a certified public accountant under AICPA standards or a performance audit by another qualified professional.


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